MBNA’s Card Portfolio Contracts in February

MBNA’s managed credit card outstandings dipped below $97 billion in February, 2.7% lower than one year ago, and its lowest level since August 2003. During February, MBNA’s charge-offs declined 19 basis points and delinquency increased 16 basis points, compared to the prior month. Charge-offs declined to 4.27% in February, compared to 4.46% for January. In May, MBNA’s charge-off rate was 4.88%, the high for 2004. Delinquency for consumer credit cards increased to 4.50% during February, compared to 4.34% during January, and compared to a 2004 high of 4.49% one-year ago. MBNA recently reported that domestic credit card loans declined 4.6% from one year ago to $80.2 billion. For complete details on MBNA’s fourth quarter results and monthly metrics, visit CardData ([www.carddata.com][1]).

MBNA CONSUMER CREDIT CARD SNAPSHOT
Month Outstandings Charge-offs Delinquency
Feb 04 $ 99.6b 4.71% 4.49%
Mar 04 $ 99.1b 4.79% 4.27%
Apr 04 $ 98.0b 4.70% 4.21%
May 04 $ 98.5b 4.88% 4.15%
Jun 04 $ 99.4b 4.64% 4.10%
Jul 04 $ 99.5b 4.52% 4.00%
Aug 04 $ 99.7b 4.52% 4.01%
Sep 04 $ 98.8b 4.22% 4.15%
Oct 04 $ 98.5b 4.36% 4.18%
Nov 04 $ 99.9b 4.33% 4.21%
Dec 04 $101.9b 4.12% 4.20%
Jan 05 $ 98.6b 4.46% 4.34%
Feb 05 $ 96.9b 4.27% 4.50%
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

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Supreme Court Dismisses a Merchant Fee Lawsuit

The Supreme Court has dismissed a NIS 1 billion class action lawsuit against Bank Leumi, Israel Discount Bank, VISA ICC, Diners Club, Isracard and American Express over merchant fees. The ruling reversed
a Tel Aviv District Court decision which permitted the lawsuit originally filed by the Union of Pharmacists chairman to turn into a class action. The lawsuit alleged that credit card companies abused their monopolistic power by charging higher fees to small and medium-sized businesses. The suit was spurred by the entry of AlphaCard
in July 1998 when it charged fees much lower than other companies. The suit was for the difference between 2% and the amount paid to the other credit card companies. AlphaCard subsequently failed.

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VISA Updates Logo and Redesigns its Card Look

VISA is updating its mark and card design including the relocation of its dove hologram to the back of the card. The dove hologram, which was adopted in 1984, will be integrated with the magnetic stripe and the “CVV2” code will be moved off the signature panel. The ‘V’ in VISA has been enhanced with a gold color to highlight the VISA wordmark’s unique serif, the size of the VISA logo has been increased, and the banners used as borders in the current design have been eliminated. VISA says the new look is the result of 18 months of work, based on research among more than 7,000 consumers, merchants, commercial customers and banks in 16 countries worldwide. VISA also says the updated brand will work better across new technologies and payment channels, such as the Internet, mobile phones and handheld devices, plus providing issuers with more card space to display their brand and product. New brand guidelines will be available to member banks and card manufacturers in June while actual card changes will take place over the next three years to five years. Starting in the fall of this year, banks can issue new cards with the updated design and format. New signage will also be available for use by merchants.

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Retail Logic Interfaces with Givex

Retail Logic is developing an interface between its core “Solve/SE” product and Givex. The collaboration will allow retailers’ eGift transactions to be routed through Retail Logic’s card processing software to the Givex system for processing. This will allow the introduction of a wide selection of enhanced products including electronic gift cards, loyalty schemes, e-coupons and incentive
programs. Givex card program are customized to meet specific requirements and can be used at all merchant sales channels. Additional features include payment via Web site, balance inquiries, card protection or enrollment in a loyalty scheme. Retail Logic has been providing payment-processing software for over 16 years. Founded in
1999, Givex is among the fastest growing transaction processors worldwide.

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Discover Launches its First Business Card

Discover is launching its first business card via a partnership with GE Consumer Finance and SAM’S CLUB. Discover is also introducing a “SAM’S CLUB Discover” card for consumers. Last month, the “Wal-Mart Discover” card was rolled-out offering three cents a gallon off gasoline at more than 700 Wal-Mart stores, and up to 1% cash back on purchases. The new cards being issued by Wal-Mart’s SAM’S CLUB division will be available in all 552 SAM’S CLUB locations in April. The “SAM’S CLUB” cards will offer up to 2% cash back for “Plus” members, and up to 1% cash back for “Advantage” and “Business” members on every purchase. There is an annual $1 million spending cap. Consumers also have no fee cash access at the register in amounts of $20, $40 or $60 when using their new “SAM’S CLUB DISCOVER” at any club location. (CF Library 2/22/05)

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AmEx and MasterCard Offer Jetsgo Refunds

MasterCard Canada is advising Canadians who purchased Jetsgo tickets with their MasterCard card and who are unable to obtain a refund or a replacement ticket for flights canceled in connection
with Jetsgo ceasing operations to contact their card issuers. MasterCard says this is a prime example of one of the important purchase protections offered by MasterCard issuers. Meanwhile, American Express said it will provide refunds to cardholders who purchased air tickets on Jetsgo with their AmEx cards and are now unable to take their scheduled flights because of the airline’s decision to cease operations. Cardholders will be refunded the full amount of their unused ticket and
applicable taxes and surcharges. For cardholders stranded mid-trip, AmEx will provide a refund on the unused portion of the original ticket
plus applicable taxes and surcharges.

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AmEx OPEN to Help Women Entrepreneurs

Non-profit Count-Me-In and the Women’s Leadership Exchange have partnered with OPEN from American Express(SM) to form Make Mine a $Million Business(TM) Program. The pilot program will give women-owned businesses access to the “three M’s” – mentoring, money and marketing know-how to help them succeed. Currently, only 2% of women-owned companies generate $1 million in annual revenues, trailing the number of men-owned, million-dollar businesses 10 to 1. Count Me In, a nonprofit 501(c)3 organization, champions women’s entrepreneurship and economic independence. The Women’s Leadership Exchange (WLE) is a New York City-based multimedia company founded by and for female entrepreneurs that features educational conferences.

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Consumers to Use Tax Refunds to Pay Card Debt

TransUnion’s TrueCredit.com commissioned Roper Public Affairs to determine how consumers planned to spend their tax refund. Forty one percent of respondents would pay credit card, mortgage or other bills, 28 percent would buy something they need and 26 percent would save the money. Only 9 percent said they would use it for “fun”. California-based TrueCredit has been a leading provider of credit management services since 1995.

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Orion Telecomm Emerges from Bankruptcy

Bayside, NY-based Orion Telecommunications has become the first and only prepaid calling card company to successfully emerge from bankruptcy protection. The emergence of OTC is driven by a $12 million dollar infusion of investment capital from The Core Value Group. Richard Roscitt, former President and COO of MCI and CEO of AT&T Solutions, will now serve as Chairman. The Company says it has embarked on 100-day “Back on Track” plan and will announce new executives and products.

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Metris’ Sub-Prime Segment Continues to Shrink

Metris Companies (Direct Merchants Bank) reports that the sub-prime segment of its portfolio declined from $4.9 billion at EOY 2003 to $4.0 billion at the end of 2004. Consumers who have a FICO credit score of 660 or less now make up 60.7% of the total credit card portfolio. Metris also says that the lowering of credit card lines, which began three years ago, has reduced average outstanding cardholder balances from $3,300 in 2003 to $3,000 last year. The issuer’s primary target FICO score now ranges between 600 and 700. Metris cardholders currently have an average household income of $45,000 and approximately 60% own their own home. Metris says that more than 90% of its existing cardholders carry a balance each month and that, on average, its cardholders utilize 50% of the assigned credit lines. Metris also noted that late, over-limit and cash advance fees, represented approximately 16% of total billed fees and finance charges last year. For complete details on Metris’ latest performance, visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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Thales Security Module Passes TransFort Testing

Thales announced that its 3D-Security Module has successfully completed compatibility testing with TransFort V6.0, Arcot System’s industry-leading e-Payment authentication solution for card issuers. Arcot TransFort(TM)) has been deployed by over 9,000 credit and debit card issuers and over 10,000 merchants are enabled to participate in 3D-Secure programs. Thales is an international electronics and systems group with $13 billion in revenue, serving defense, aerospace, security and services markets. Arcot Systems, Inc. is a provider of convenient and secure e-payment, digital signing and identity management solutions.

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UMB Bank Expands its ATM Presence via Walgreens

UMB Bank has reached an agreement with Walgreens to increase the bank’s presence in the Midwest. UMB ATM installation in 300 Walgreens stores will expand the number of ATMs by 62.5 percent for UMB in the major markets it serves. Missouri- based UMB Financial Corporation is a $7.8 billion multi-bank holding company. Walgreen Co. is the nation’s largest drugstore chain with fiscal 2004 sales of $37.5 billion. The company operates 4,738 stores.

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